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Archive for the ‘Pricing’ Category

Not getting Traffic – What’s the problem?

J. Andrew English J. Andrew English
Wednesday, April 18th, 2012

The first things to consider when you are not receiving the kind of traffic you were hoping for is quite simple – What is on the market in my area? What has sold within the last 3 months within my area? How much traffic are properties in my area receiving?

So how do you obtain this information – Gauging how much traffic your neighborhood properties are getting is simple and easy. Get out in the community and ask the owners themselves. Go directly to your neighbor and ask. It’s that simple. If you are thinking to yourself… My house is superior to my neighbors, etc… That’s ok. What we want to find out concerns if the neighborhood is getting traffic. Remember, Real Estate is all about location. This will help determine how “in demand” your subdivision is at the moment.

Sold Data for the last 3 months – The county assessor will show you recorded sales based upon address and subdivision. You can research this online. If you have difficulty with this, shoot us an email at info@congressrealty.com and we will email this info to you directly. Once you have this data, this is where you can compare your property and its features to those that have actually sold and at what price, price per sq ft, etc…

What is on the market in my area – To accomplish goal 1, you need to know which properties are on the market. You can use sites like Realtor.com to determine this or send us an email and request they we email you all of the active properties in your neighborhood directly from the MLS.

 

Pricing your property

J. Andrew English J. Andrew English
Thursday, February 10th, 2011

Most agents agree the key to selling your home is pricing the property correctly from the get go. The idea behind this is that properties fresh on the market see the bulk of their traffic within the first 1-6 weeks of listing. A property that is priced too high will not benefit from this traffic and will eventually net less in the long run compared to a property that is priced correctly from the start.

How do I price my property? The best method for pricing your home is to use comparable sales in your subdivision or immediate area. Essentially, what this means is that you are looking for properties in your neighborhood that have sold within the last 6 months. Ideally, you want to find properties that have similar sq ft, views, bed/baths, lot size, upgrades, etc….

How do I take into account short sales and REO’s? This is tricky. Some sellers completely disregard them, others give them too much weight. Most short sales you can throw out simply based upon the fact that less than 10% of every short sale listed will ever close escrow. REO’s are a different story. REO’s that are in good condition should be considered in pricing your property. The reason for this is that you are competing against this property for a buyer. While you may not give the REO equal weight, they should be considered.

If you need help running a CMA (Comparable Market Anyalysis) for your property, give us a call. We can run a CMA for you at no cost anytime you wish.

Finding the bottom of the condo market

Donald L. Plunkett, Jr. Donald L. Plunkett, Jr.
Thursday, September 17th, 2009

Several sources have pointed to the Corus Bank failure as a critical step in determining what the true market value of high rise condos are.

Corus funded a number of speculative high rise condo projects in markets where we do a lot of business.  A few examples in Las Vegas:

  • One Las Vegas
  • Meridian
  • Platinum
  • Loft 5
  • Juhl
  • Newport Lofts
  • Panorama Towers
  • Village Green
  • The Residence Las Vegas
  • Soho Lofts
  • Copper Canyon
  • Boulders at Lone Mountain
  • Verano
  • Spanish Palms

Corus also funded a number of condo conversion or development projects in Arizona and Southern California, such as 44 Monroe (Phoenix), Safari Drive (Scottsdale), Wilshire Boulevard Condominiums and Solair (Los Angeles).  Now that the FDIC has stepped in, many of these largely unsold projects have been put up for sale with a 30 day deadline for a private placement transaction.   Corus previously tried to sell some of the completed REO or loans to investment groups, but the bid-ask spread was too high (because they would have been insolvent to let them go at the market price).  Now that they have failed, the true price will be discovered.

Even though the price discovery will be painful for someone who bought at or near the peak, it is important.  It is not healthy to have 50 units on the market at a huge range of prices and only 1 or 2 pending sales.  Lenders don’t even want to touch financing the few units that are purchased.  However, once a bottom price has been identified and a strong, patient owner is in place to gradually sell off the remaining developer units, the prices in these buildings will stabilize, financing will become available and transactions will again start taking place.

Reasonably Priced Homes are Selling in Flagstaff

Donald L. Plunkett, Jr. Donald L. Plunkett, Jr.
Monday, November 17th, 2008

There is a nine month supply of homes in the under $350,000 range; this is above the six or fewer months worth of homes that is preferrable but far below the amount available in the higher price ranges.  What we are seeing in Flagstaff is that home prices are adjusting to levels that match up with local incomes.

Some Realtor comments:

“From a seller’s standpoint, what I see in this market as selling quickly are properties that are priced aggressively, that are very clean and that are easy to get into.  A property will sell in a week that is like that.”
Valerie Caro, Realtor with Common Goal Realty

Another thing going on is that people are chasing the prices that are priced at the very lowest levels on the MLS, “You wouldn’t believe how many calls I got on a $135,000 cabin I had in Parks.”
Jim Snook, Realtor

All Homes Nearby are not equal

J. Andrew English J. Andrew English
Thursday, September 4th, 2008

A mistake that many people make is assuming property values for neighboring subdivisions are equal or very close in value. As a result, many sellers will try to use comparable sales from nearby subdivisions in pricing their homes. Normally, those properties that fall within your immediate subdivision will be used by any appraiser appraising your property. Typically, an appraiser will only go outside of the subdivision if they absolutely have no other choice. (if there are not enough sales within the last 6 months inside your subdivision) Let’s look at an example in Anthem, AZ. Properties inside the gates of Anthem CC comp out at very different values than those properties outside the gates, despite being a stones throw away from each other. The thing to keep in mind is that distance between properties isn’t always the most important factor in using a comparable sale. A great example of this is in Seven Hills, located in Henderson, NV. This community contains 10-15 small subdivisions within the master planned community. Many of these gated areas feature homes with glorious strip views, while others back to large hills. (with no view other than the upward desert slope) The thing to keep in mind as a seller is that you want to go beyond distance, examine the various amenities and other factors of each property and compare these to yours.

List Price to Sold Price

J. Andrew English J. Andrew English
Thursday, August 7th, 2008

One of the questions we receive often concerns list price to sales price ratio. I can’t stress enough how unimportant this statistic is. Let me explain why;

We do not force sellers to list their property at a certain price. We will take the listing at any price the seller sets. As a result, the seller has free reign over the price adjustments of the property.  Now, a typical Realtor(R) will never allow this to happen. Their fee is contingent upon the property selling. All agents are taught not to take over priced listings. Thus, I can’t help but point out the conflict of interest. The seller’s goal is to receive the highest and best price. The agents goal is to convince the seller to market the property at a price low enough to guarantee a sale. (otherwise, they don’t  get paid) I have seen agents try every trick in the book to convince a seller to lower their price. Below is an article on the listing presentation and over priced listings.

When you examine list price to sold price, pay close attention to why this # may be abnormally high for a certain agent. Are they listing homes too low to guarantee a quick sale? An expired listing from the sellers standpoint may not be the worst thing in the world when they are trying to acquire the highest and best price. On the other hand, Realtors(R) will do anything to avoid expired listings. From the typical Realtor(R) viewpoint, an expired listing is a waste of time and marketing money spent.

http://www.inman.com/opinion/guest-perspective/2008/08/6/death-listing-presentation

Is my home overpriced?

J. Andrew English J. Andrew English
Wednesday, April 2nd, 2008

The market will tell you the answer to this question 9 times out of 10. If you are receiving a high # of phone calls from drive by traffic inquiring about your price and other specific questions, yet receiving no activity from Realtors®, there is a strong possibility you are on the high side. Keep in mind, the majority of drive by traffic will not have access to any information about your property, they will call to find out about upgrades, etc… a Realtor® already has this information in front of them. They can make a decision on their opinion of value using the MLS listing and other resources available to them. While this is not a definite method of determining a value, it can be a useful method of judging extremes.

If you have any questions regarding your pricing, ask Congress Realty to run a CMA for you. We can base this report on any particular criteria you want the #’s run upon. There is no cost for this service and it can be a very useful tool. This will help you keep up with newly listed properties, in addition to recently sold properties within your subdivision.

How can I find out what has sold in “my area”?

J. Andrew English J. Andrew English
Monday, March 24th, 2008

Most sellers want to know what has been selling around them so that they can use this data to price their own home. There are 2 reputable ways to acquire this information. The first is to email our brokerage and request a CMA. Simply give us the criteria you would like us to utilize in producing the data. For example, zip code, subdivision name, school district, 1 story, etc… Also include how far back you would like the sold comp pulled. (most commonly this will be no more than 9 months.) When our brokerage runs comps, we are running MLS comps. This means that we are providing the seller with MLS listings that have sold, including those which are active, pending, etc.. Sellers can also benefit from running their own comps. The way you do this is simple. Go to your county assessor website and click on parcel search. From here, you can search any recorded transaction in your area. Most counties will give dates recorded, price, etc.. This is useful because this will also give you FSBO transactions that did not sell by a brokerage. By using these two sources, you will be covering all of your bases for acquiring comparable sales information.